Some would claim that the Federal government is financed on the backs of a few wealthy taxpayers who pay a disproportionate amount. In fact, the Federal government is financed on the backs of the vast majority of Americans who make almost all their income from their wages and other sources on which the Treasury gets regular reports. Most Americans willingly pay their taxes and in fact often vote to increase them if they're convinced that they're being treated fairly, if they're getting full value, if they have confidence in the system.
We need that confidence at the Federal level; to get it fundamental fairness and equity needs to be an overriding principle.
We need a fair tax code. For too long, the budgets, the tax code, and the regulatory framework have been tilted in favor of people who needed help the least and shortchanged the people who need it the most. Regulatory shortcuts gave the financial markets, or the deregulated electrical markets, no adult supervision. The tax code, as Warren Buffett has famously pointed out, that has his receptionist pay a higher tax rate than he does, is a long overdue for correction. Why should we treat rich sugar producers in Florida with lavish subsidies while shortchanging hungry children? But for a combination of public indifference and political influence we shouldn't and we wouldn't.
We need a sustainable tax code. This has been my guiding star for public policy in Oregon throughout my career on the state, local, and Federal level. We must achieve balance with our financial resources, the planet, and the environment around us. We can no longer employ policies and practices that enrich a few, benefit many now, and inevitably shortchange our future. Sustainability needs to be the guiding principle in everything that we do.
If we were to treat all taxpayers the same way we treat ordinary taxpayers, there would be hundreds of billions of dollars of taxes collected because income would be reported and there would be far fewer exemptions to a evade the stated tax on the income. If we start reporting what we earn, squeeze out unfair differences, even the playing field for businesses to go ahead and compete, not to torture books and lobby, we will balance our books while we reduce the pressure on the taxpayers in the long run and increase their comfort and confidence as a result.
The economic crisis is among the greatest challenges that the United States has faced. There's plenty of blame to go around, from past administrations and Congresses who cared more for special interests than to appropriately protect the public interest, to American consumers, a few of whom actually abused the system themselves. Too many others were simply uninformed and didn't take the necessary steps to assure that they were making the proper financial decisions. A lax financial regulatory system and a Federal Reserve system enabled reckless behavior. On balance, the entire system failed and our country is paying the price and will continue to do so for years to come.
That said, there are important steps that we can take now to make our nation more fiscally fit.
We need to pass into law a set of financial product protections as an important step towards re-balancing priorities and strengthening the foundations in our financial system to deal with families, consumers and the integrity of our institutions. Although legislation that outlines some of the protections was recently signed into law, it is just the beginning of long term reform. It creates new federal regulations to protect consumers and the global economy from the risks of the systemic failure of large, interconnected financial companies.
The creation of the Consumer Financial Protection Agency (CFPA) is an important part of this system. Just as American consumers are protected from products that can cause serious physical harm, they should also be protected from products that can cause financial ruin. The CFPA will extend to financial products, such as mortgages, credit cards, and "payday" lenders, the consumer protections already given to everyday goods and will closely examine lending practices to ensure that consumers are treated fairly. It will also require that banks prominently display information regarding the fees and charges associated with their overdraft protection programs.